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4 July 2007 : Column 248WH—continued

We must recognise those pressures, find a system for regulating this new market, provide security and continuity for those with pitches, achieve fairness, and ensure that pitches remain attractive. I listened to the hon. Members for Hove (Ms Barlow) and for Livingston (Mr. Devine), the latter of whom is to be congratulated on securing
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this debate. However, we must bear in mind also the need to ensure on-course attendance by those bookmakers, because, quite frankly—far be it for me to decry any one of Yorkshire’s nine race courses—a rainy day at Catterick on new year’s eve is a pretty miserable experience. I have been there many times on new year’s eve, and it usually rains and there are not normally many people about.

If we want those on-course bookmakers to remain, we must listen to their arguments. Ensuring their attendance is critical. We now have more than 1,500 fixtures on race courses—that is a hell of a lot of on-course bookmaker hours, and we need to ensure that they continue.

I agree with the hon. Member for Barnsley, East and Mexborough (Jeff Ennis) that we need to achieve consensus. With regard to changes in the Gambling Act 2005, I would be surprised if the Minister’s response was that the Government would reopen the primary legislation, because, with all the other issues outstanding, it would be a can of worms. However, we need to achieve consensus. We have five years to sit down and discuss a way through these issues. I am sure that I speak also for the hon. Member for Barnsley, East and Mexborough when I say that the all-party racing and bloodstock group is ready, willing and able to sit down and be a conduit through which those discussions can take place.

10.20 am

Chris Bryant (Rhondda) (Lab): I enter this debate as a complete ingénu. I know absolutely nothing about racing. I have never been to a race course and have never placed a bet. I recognise that my hon. Friend the Member for Barnsley, East and Mexborough (Jeff Ennis) knows a great deal more about this subject than I do, although I note that of the two Yorkshire Members—my hon. Friend and the hon. Member for Ryedale (Mr. Greenway)—who have contributed so far, one suggested that Yorkshire is a nirvana and the other that it is a damp and miserable place on new year’s eve.

A constituent of mine, Martin Davies, came to my constituency surgery a few weeks ago. He is an on-course bookmaker and has invested a considerable amount of his own money, and his own future, in building up a business on the basis of buying pitches. I want to make a very simple speech really. I believe that people bought pitches in good faith from the National Joint Pitch Council, believing that they were doing so in perpetuity—not, I would say, for life, but in perpetuity, which is quite an important distinction, because they believed that they were buying them and would then be able to sell them to another person, who might die a long time after them, but that is completely irrelevant. People believed that they were buying something and that that was their property—an asset that they had bought.

I greatly welcome the fact that my hon. Friend the Minister has this new portfolio. I am sure that he will bring great wisdom to it, but I hope that he will take some time in arriving at a decision on this issue. From his earlier intervention, it seems that his argument will be that people did not reasonably believe what I have set out and that they should have understood somehow or other that they were not buying pitches in perpetuity.

Mr. Sutcliffe: My hon. Friend should not read too much into my intervention: it was to help me to understand the argument that my hon. Friend the Member for Hove (Ms Barlow) was making.

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Chris Bryant: I am grateful to the Minister for that intervention, because it seems to me that it was entirely reasonable of people to enter into that expectation. The previous system was hereditary, so one could only assume that any subsequent system was likely to be for more than just a few years. Moreover, the new system was being sold to them as a fairer system, not a less fair system. The injustice of what seems likely to happen in 2012 is so manifest that any reasonable person would consider that anyone expecting that they were buying pitches in perpetuity held that expectation on a reasonable basis.

On top of that, nobody has yet shown me any evidence that the NJPC made it clear that there would be a final date when all the pitches fell into abeyance. At no point was it made clear to people that they were buying only a temporary lease. Indeed, I would say that although it was clearly a form of leasehold, it was that form of leasehold that is commonly known as virtual freehold in British law. I believe that that is what people were reasonably buying.

Consequently, there are two elements of failure in the system. First, I believe that the Racecourse Association, through an element of legislative jiggery-pokery, has in effect engaged in a process not of petty larceny, but of grand theft. That is, to be honest, what will be happening in 2012 if the abandoning of pitches is allowed to go forward. Secondly, Parliament has not fully done its job. Many areas of many Bills may be passed without our fully understanding the their implications and consequences but, as the hon. Member for Ryedale made clear, what we are discussing now was never the issue when the Gambling Bill was going through Parliament. Perhaps we should have known that this issue would come along. It is therefore incumbent on Parliament to put the problem right.

I say to my hon. Friend the Member for Barnsley, East and Mexborough that he is far too nice—in many regards perhaps, but particularly in suggesting that a mere extension to seven years would be enough to appease people. If we were talking about 25 or 35 years, we might be in the right ball park, but people have invested dramatic amounts of their money and their livelihood in buying pitches, and for the slate simply to be wiped clean because of a piece of legislation that no one fully understood would be completely and utterly wrong. A mere extension to seven years would be wholly inadequate.

10.25 am

Mr. Paul Truswell (Pudsey) (Lab): I congratulate my hon. Friend the Member for Livingston (Mr. Devine) on securing the debate. It is a pleasure to follow my hon. Friend the Member for Rhondda (Chris Bryant), because my knowledge of this issue is probably inferior even to his own. I am not a gambler and have no specialist knowledge of the turf or turf accountancy, although I do remember, in the dim and distant past of my childhood, a favourite uncle skulking in back alleyways before his business became a little more legitimate. My knowledge, such as it is, was gleaned many years ago at my father’s knee as I watched interminable hours of racing on the BBC’s “Grandstand” while he followed the fortunes of the handful of horses on which he had bet a few shillings in those halcyon, pre-decimal days of black and white
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television. Such were his limitations as a punter that he was one of the few people who actually backed Foinavon in the 1967 grand national, as opposed to the many millions who claimed subsequently to have done so.

However, despite the fact that it might be said that I do not know a stirrup from a silver ring, I can recognise an injustice when I see one. Only yesterday, a constituent of mine who is an on-course bookmaker wrote to me about his concerns and the impact of what is happening not only on him and his family, but potentially on other businesses that he runs. That inspired me to speak for a few minutes today. I will not name him, because I have not had time to obtain his permission to do so, but his story is similar to many others that have been related today.

My constituent says in his letter:

that is the word he uses—

On my constituent’s behalf, I would like to put three questions that he put in his letter. Are the RCA statements correct? If so, was that really the Government’s intention? If not—this is the point made by all hon. Members—what plans are in place to rectify the position? My constituent continues:

and the message has always been that that was not what the Government intended.

He says:

He goes on to explain that he runs a major manufacturing company—it is in the constituency of my hon. Friend the Minister, although he is a constituent of mine—and because of the way in which the investment has been made, he fears that there may be impacts on the company, which employs 100 people.

I can therefore only echo all the points that have been made by my more knowledgeable colleagues, including my passionate and hon. Friend the Member for Rhondda, and hope that the Minister will give my constituent and other people in the same position some comfort in his response today.

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10.29 am

Mr. Iain Duncan Smith (Chingford and Woodford Green) (Con): I did not intend to speak today, but I want to make two points. Before doing so, I congratulate the hon. Member for Livingston (Mr. Devine) on obtaining the debate and the Minister, who is an old football partner of mine, on his new position. I feel a lot more confident now that he is here and I hope that that will be borne out.

I am no lover of the NJPC, which has been a shambles since the day it was set up. It has been badly run and it is partly to blame for what has happened. It should have seen what was coming, but it failed to do so. Its whole purpose is to represent the bookmakers, but it has failed to do so.

I want to raise two points that have not been mentioned. One is that race course owners embarked on the process that we are discussing some time ago, and that should have been spotted. Some were placing pitches well away from the main stand as a way of devaluing their ability to trade; indeed, on one or two occasions, pitches were placed by the car park. The attempts by the RCA and race course owners to devalue what pitch owners are doing is therefore historical, and the Minister must look at that. As the hon. Member for Rhondda (Chris Bryant) said, pitch owners have purchased a position. Their problem, however, is that it is more like a flying freehold because there is nothing underneath it. All that they have purchased is the right to trade in a position, but the race courses can place that position anywhere they like, which devalues it. That must be borne in mind.

My other point is that seeking the highest bidder opens the industry up to corruption. There is a huge amount of money swashing around in eastern Europe, and people want to launder lots of it. There are lots of stories suggesting that it is possible to launder money through British race courses. I warn the Minister right now that we will be on the edge of a really serious process of corruption if we do not watch it. One of the guardians of the industry is the little bookmaker who, by his very size, is not open to such corruption. It is worth carefully looking at the issue, because the race courses may not be bothered with it.

To conclude, I simply line up with everybody else in saying that the sad thing is that the people who should have been represented have not been. We are talking about the small people—the small business men—and if there is one thing that any Government should do, it is to stand on the side of the small people.

10.32 am

Mr. Don Foster (Bath) (LD): I welcome the Minister to his new post and I am sure that we all look forward to his response. So far, the debate has been very one-sided, and I will stay on the same side as everyone else.

I congratulate the hon. Member for Livingston (Mr. Devine) on introducing the debate. I also congratulate the hon. Members for Hove (Ms Barlow), for Reigate (Mr. Blunt), for Barnsley, East and Mexborough (Jeff Ennis), for Ryedale (Mr. Greenway), for Rhondda (Chris Bryant) and for Pudsey (Mr. Truswell), as well as the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith).

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The hon. Member for Livingston began by reminding us of what happened in 1998, when the list position arrangements were changed to allow trading in seniority positions. He welcomed that, although the right hon. Member for Chingford and Woodford Green has expressed serious concerns about it in earlier debates, including, most recently, on 14 March. As to which of the two is right, all that I can say is that the various constituents who have come to see me rather favour the view taken by the right hon. Gentleman.

However, we have moved on and we are now debating a separate issue, which has been well rehearsed in the debate. We are discussing the nature of the trading and whether people could reasonably believe that what was being traded was something that they held in perpetuity. The Minister rightly intervened on the hon. Member for Hove to ask whether people could reasonably have expected that to be the case—a point also raised by the hon. Member for Rhondda—and it is worth looking at that question. I will therefore concentrate largely on that issue in my brief contribution and I hope that that will help the debate.

As we know, the change in arrangements was introduced in December 1998. It is worth referring to clause 5 of the sales catalogue that was issued at that time, which says:

I would argue strongly to the Minister that responsible authorised bookmakers did do their due diligence test, but that they certainly could not have been expected to know what would happen following the introduction of the new legislation and its erroneous interpretation by the RCA.

It is also important to note that the extensive conditions detailed in the catalogue consistently emphasise that the buyer is buying a title, which can be transferred only under the NJPC arrangements. Under company law, a title constitutes an asset given to the holder of that title. People therefore believed that they were buying a title, which is an asset, in perpetuity. They were further led to assume that that was the case because all the relevant documentation referred to an opportunity to buy into a prosperous new era. They therefore assumed that they had got something that would be of financial benefit to them.

Underpinning every statement in the documentation was the idea of establishing a profession with stability and longevity. The issue of obtaining a title was made very clear by the NJPC, which set out four principles in its documentation. Those principles included the establishment of relativity, the affirmation of procedure, the determination of location and security of title. That is absolutely clear, but that security of title is now under threat, which is having a huge financial impact on on-course bookmakers and particularly, as the hon. Member for Barnsley, East and Mexborough rightly said, on the colourful, smaller family-owned businesses, which are now in serious difficulty.

Why has all this happened? Why are people under threat? I do not understand why they are under threat. I have not only read the Gambling Act 2005—I served on the Committee that considered it and I have looked back at the debates about it—but obtained the draft
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regulations relating to the relevant sections—sections 167, 168 and 355(1). The only relevant issue raised in the regulations relates to the five times rule, which paragraph 1(8) of part 2 makes clear will go after 31 August 2012. I do not understand, however, why that gives the RCA the right to make all the other decisions that it has made.

I therefore have a few quick questions for the Minister. First, is he aware that his Department has been informed of such concerns and worries over the past three years? Is he aware that a letter was sent to his Department as a recently as eight weeks ago, but that there has still been no reply?

Secondly, is what the RCA is doing in the spirit of the Act or does it run contrary to it? Is the Minister aware that the federation will have no choice but to go to the European Court of Human Rights, as the hon. Member for Reigate said? It will do that under the first protocol to the European convention on human rights, which relates to property rights.

Thirdly, was the working group that was set up in the Minister’s Department to ensure the smooth running of the Act given any remit to look at the issue before us? Although concerns were raised, I think that the Minister will discover that it was given no such remit. Perhaps he can explain why.

Finally, if the Minister has the opportunity, will he address an issue that has not been touched on so far? Bookmakers from other European countries, and particularly from Ireland and Australia, are involved in the issues before us, which means that there could also be EU involvement.

The hon. Member for Ryedale summed things up when he said that we need a fair solution. I served on the Committee that considered the legislation, and the present situation was not intended. We therefore look to the Minister not necessarily to find a compromise—indeed, we should not be talking about compromise because the proposal was not right in the first place—but at least to acknowledge that there is a significant issue of compensation to be addressed.

10.38 am

Anne Milton (Guildford) (Con): I, too, extend my congratulations to the Minister, and it will be a pleasure to face him on occasions such as this.

Like the hon. Member for Rhondda (Chris Bryant), I do not have huge experience of race courses or betting, but the hon. Members for Hove (Ms Barlow) and for Livingston (Mr. Devine) eloquently described what is quite a complex situation, and everybody who was unclear about the situation will now understand it fully.

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